EDD immediately branded the Business Insider report as “bogus” and demanded a retraction. EDD Director Pam Harris said the “reporter”―referred to in quotes―repeated “erroneous speculation” that the state had a backlog of unemployment insurance claims and did not file all or part of them on a timely basis. Harris chastised the publication for not calling EDD for comment or fact verification before running its story. Business Insider refused to retract the story, saying that it properly attributed its information to an unnamed Department of Labor official.

The story was picked up and repeated on news and blogging outlets, especially conservative ones, and contributed to a growing right-wing meme that the government is fudging bad economic data to help Democrats at the polls in November.

Last week, former General Electric CEO Jack Welch led the charge of conspiracy minded critics who said the Obama administration had rigged unemployment numbers, which showed a rate drop from 8.3% to 7.8%. He called it an “absolutely impossible . . . faulty number” and implied corruption was behind the decline when he tweeted, “These Chicago guys will do anything . . . can’t debate so change numbers.”

In subsequent interviews, Welch stood behind his comments (“I just raise the question”) but admitted he had no evidence. In a Wall Street Journal op-ed Wednesday, Welch likened the Obama administration to rulers in China and the Soviet Union, made the same thinly veiled conspiratorial allusions and apologized for not including some judiciously placed question marks in his tweets.